- Pakistan Rupee (PKR) rises despite KSE 100 benchmark diving 1000 points
- Oil declines -3.5%
- US Dollar (USD) rises on safe haven flows amid covid fears & political jitters
- US PMIs, FOMC and non-farm payrolls in focus
The US Dollar Pakistan Rupee (USD/PKR) exchange rate is holding steady after falling steeply across the previous week. The pair lost 1.3% last week closing on Friday at 160.000 at the low of the week. At 09:15 UTC, USD/PKR trades just a few pips higher at 160.05 after hitting a five and a half month low of 159.95 earlier in the session.
The Rupee is advancing despite heavy losses in the domestic equity market and as oil prices tank. The benchmark KSE 100 index dropped over a 1000 points in trading on Monday, equating to a 2.7% decline as the bears dominated, adding to steep losses on Friday.
Tanking oil prices were offering support to the Rupee. Oil has plummeted over 3.5% with West Texas Intermediate trading $34.50 as more lockdowns in Europe add to fears that global demand will be severely hit. At the same time production in Libya is rising rapidly at a time when it is least needed.
Whilst the US Dollar is falling versus the Pakistan Rupee, the greenback has been advancing versus its major peers. Rising covid cases both in the US and in Europe is unnerving investors, who fear that the economic recovery will be derailed. With France, Germany and now the UK all heading back into lockdown investors are seeking out the safe haven properties of the US Dollar.
In addition to covid concerns US political jitters are also dragging on the market mood ahead of the US Presidential election tomorrow.
Democratic candidate and former vice President Joe Biden has maintained a steady lead over President Trump in the national polls. However, in the key swing states the race is showing signs of getting tighter. There is also a high risk of a contested election result which could keep boosting safe haven flows.
This week is a busy week for data, with US PMIs, a Fed rate decision and non farm payrolls.